Employment Law News - January 2017

Natalie Ruane reports on the latest Government announcements on employment law.

National Living Wage update 2017

The Government’s new National Living Wage will increase on 1 April 2017. If your employees are aged 25 or over and not in the first year of an apprenticeship, they will be legally entitled to at least £7.50 per hour from 1st April 2017. This will become a term of their contract, implied by law from that date.

Apprenticeship Levy on larger employers introduced

The Apprenticeship Levy is coming into force in April 2017. The Apprenticeship Levy is a government incentive which aims to fund more than three million apprenticeships within the UK by 2020. It impacts upon all public and private businesses with a payroll bill of more than £3 million. The basic charge is 0.5% of your PAYE bill. Smaller companies can claim a £15,000 ‘training allowance’ to offset this.

The main purpose of the Apprenticeship Levy is to encourage businesses to take on more apprentices. This can be through external recruitment or retaining current staff who want further training and to learn new skills. With careful preparation to make best use of the initiative, employers could benefit from available funding and pay very little towards the cost of training apprentices.

If your PAYE bill falls below or is £3 million, the government will continue to pay for 90% of your apprenticeship training costs.

Statutory Sick Pay increases

From 2nd April 2017, the current weekly rate of statutory maternity/paternity/adoption/shared parental leave pay (currently £139.58, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate) is being increased to £140.98.

The end of salary sacrifice?

Salary sacrifice schemes will begin to be phased out with no new ones created from April 2017. Historical benefits will be protected until 2018-2021 depending on the type of scheme in place.

Employer provided pension savings, employer provided pensions advice, childcare vouchers, workplace nurseries, directly contracted childcare, cycle to work schemes, and ultra-low emission vehicles (emitting 75g CO2/km or less) will continue to be tax free, but other job perks will be treated as cash income from April 2017.

For further information about employment law changes taking place in 2017 please contact Employment & HR Solicitor Natalie Ruane, on 01228 552222 or nr@burnetts.co.uk